A federal appeals court has overturned two of 10 wire fraud counts against Indianapolis businessman Timothy Durham, saying prosecutors failed to enter some key evidence into the trial record.

The U.S. Court of Appeals, however, upheld all other counts against Durham and two associates, who were convicted of masterminding a swindle that caused more than $200 million in losses to thousands of people, many of them elderly or living on modest incomes.

All three were convicted of conspiracy and securities fraud. Durham was found guilty on 10 counts of wire fraud. James F. Cochran was convicted of six counts of wire fraud, and Rick Snow was convicted of three counts of wire fraud.

The court, in a 31-page ruling on Thursday, said prosecutors did not introduce enough evidence into the record to show that two of the 10 wire transfers, totaling $300,000, were part of a fraudulent scheme.

“It was clearly an oversight, but the mistake leaves a crucial gap in the evidence on those counts,” the court wrote.

It also ordered that Durham be resentenced to adjust for the two overturned counts.

It is unclear how much Durham’s sentence could change as a result. He was sentenced to 50 years in prison in November 2012.

Durham’s attorney, John Tompkins, declined to say whether he expected his client to get a substantially reduced sentence.

“Until I get a chance to look at the [sentencing] guidelines, I really can’t comment, other than to acknowledge those were two of the smaller transactions,” Tompkins said.

Cochran was sentenced to 25 years. Snow was sentenced to 10 years.

The three had also challenged the FBI’s use of wiretaps, and argued that the prosecutor had committed misconduct. They also argued the district court failed to give proper instructions to the jury. The appeals court rejected all those challenges.

According to evidence presented at his trial, the three took control in 2001 of Fair Finance Co., based in Akron, Ohio, a well-established and respected investment and finance firm.

Durham and associates changed the operation quickly, using investors’ money to make loans to their family and friends. They also used the money to fund lavish lifestyles, including mansions, swanky offices and elaborate parties, including a Playboy-themed party.

Durham became the company’s chief executive, Cochran was the chief operating officer and Snow was the chief financial officer.

The three dramatically increased sales of Fair’s certificates and offered them for longer terms at higher interest rates. The increased sales were used to fund millions of dollars in loans to Durham and Cochran, their relatives and related companies.

The scheme unraveled when one of Fair’s directors alerted the FBI that the company was being operated as a Ponzi scheme. The Ohio Department of Securities also opened an investigation.

One of the overturned counts involved a transfer of $250,000 from Fair Finance to its parent company, Fair Holdings, in 2007. The other count involved a transfer of $50,000, also from Fair Finance to Fair Holdings.

Prosecutors had introduced a single-page printout reflecting each transfer, as well as an email in one case.

The court said the evidence showed the wire transfers were made, but did not establish that the transfers were part of a fraudulent scheme.

“The government apparently intended to introduce additional evidence regarding the circumstances of these transfers, but neglected to do so,” the court wrote. “The single-page printouts were meant to be the first pages of much larger exhibits.”

Call Star reporter John Russell at (317) 444-6283 and follow him on Twitter @johnrussell99.